Large corporations and institutions acting in a way that cause great personal heartache, loss or humiliation to individuals, and then no one in these organisations taking responsibility, has become a familiar story line in Britain over the past few years.
The rapid rise, and even more rapid fall of Royal Bank of Scotland in the wake of the 2008 economic crisis, would have caused great personal loss to many people in the UK had it not been for government intervention worth £45 billion. For the meteoric rise of RBS from, as Forbes called it, ‘nonentity to global name’, Fred Goodwin – with his aggressive strategy of business expansion and increased activity in private equity and sub-prime markets – was lauded as almost singularly responsible (named by that same publication as Business Man of the Year in 2002). When the bank had to be bailed out, there was no corresponding wooden spoon, just an exit via the back door. Sir Fred retired 10 years early with a pension of over £340,000 a year.
As a result of this, the blame seemed to disappear, rather than falling at Sir Fred’s feet. An FSA report, for instance, found that the executives had not acted in a way which warranted any ‘enforcement action’. “It’s really a mealy-mouthed, Teflon-type statement.”, responded one City lawyer, “I find it very hard to believe that given their findings of ‘bad decisions’, there still has been absolutely no one found at fault”.
There are complexities to the banking collapse, for which no individual was singularly responsible and to blame Fred Goodwin for these would certainly be to overestimate him yet again. But ‘market forces’ are too often invoked as the impersonal cause of significant social and economic damage. Cultures are rooted in people and actual decisions. Leaders aren’t responsible for every bad or good call, but they are responsible for the broad direction of an institution, in which certain kinds of actions become feasible and reasonable. Given his role in the company, surely he should have taken responsibility for his actions and been subjected to proper investigation for his part in causing the collapse of a 300 year old British institution.
Other examples can be found in diffusion of accountability between BP and contractors Transocean and Halliburton after the Deepwater Horizon oil spill, or in that of the Catholic Church in light of the numerous cases of abuse that were never reported to the police. In each of these cases, the buck has never really stopped anywhere – and even when strict legal responsibility has been recognised, few have accepted moral culpability.
On Tuesday, Rupert Murdoch attempted to avoid responsibility for the malpractice at the News of the World, giving the Parliamentary Select Committee the excuse that the paper represented less than one percent of his global business interests. This should not be counted as a valid excuse, not because he should necessarily have known but he should have been well aware of the tone his tabloid titles adopted.
This is not a suggestion that we should have a system similar to that in premier league football, where at the end of an unsuccessful season, the manager takes 100% of the blame and loses his job irrespective of how the individual players have acted. But rather a suggestion that after all the illegality, hurt and loss of trust to come from the phone hacking scandal, executives should rethink how they behave, setting an example for their employees to follow. Ultimately, though, this has to be backed by real sanctions against those who fail to enforce the highest standards of integrity in their institutions.
George Fitzherbert-Brockholes recently completed an internship at Theos and is going on to read for a masters in Middle East Politics at the
